Front Matter

Front Matter

Ruben Lamdany
Published Date:
April 2013
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© 2013 International Monetary Fund

Cover design: Seemeen Hashem, IMF Multimedia Services


Joint Bank-Fund Library

The role of the IMF as trusted advisor / prepared by an IEO team led by Nancy Wagner and Marcelo Selowsky. – Washington, D.C. : International Monetary Fund, c2013.

p. ; cm.

At head of title: IEO, Independent Evaluation Office of the International Monetary Fund. Includes bibliographical references.

ISBN 978-1-47557-309-1

1. International Monetary Fund. I. Wagner, Nancy L. (Nancy Louise). II. Selowsky, Marcelo. III. International Monetary Fund. Independent Evaluation Office.

HG3881.I58 R65 2013

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“The crisis has changed us—new approaches, new tools, new relevance. The key contours of the future IMF are emerging… So what should the Fund look like for the future? First off: The IMF must always be a trusted advisor.” (The Managing Director’s Annual Meetings Speech, Tokyo, October 12, 2012).

How well does the IMF perform this trusted advisor role in the eyes of country authorities? Does the Fund facilitate an environment that encourages country authorities to test their own ideas, discuss sensitive policy areas, and seek out the Fund’s advice?

Providing policy advice to its member countries is an integral part of carrying out the Fund’s mandate to foster macroeconomic stability and thereby facilitate prosperity. Ultimately, the means to achieve these goals is to have Fund policy advice translated into concrete action. Key to achieving such traction is the receptivity of countries to advice, which depends not only on their confidence in the quality and relevance of the advice, but also on the relationship established between Fund staff and member country authorities. The evaluation explores these issues on the basis of evidence gathered since 2005, but emphasizes the period since the onset of the global crisis in 2007–08.

This evaluation finds that, in the aftermath of the global crisis, the Fund’s image has improved markedly, with the Fund now viewed as more flexible and responsive than in the past. However, the evaluation also identifies some long-standing problems and other challenges that can undermine trust in the Fund and that should be addressed if the Fund is to sustain the progress observed. What are these problem areas and challenges?

An important challenge is to reduce the perceived tension between the Fund’s dual roles of trusted advisor and watchdog. Another challenge facing the Fund is improving the value-added and relevance of Fund advice, including through enhancing country-specific knowledge, avoiding overly generic advice, and bringing to the table policy lessons from other countries’ experiences. An additional critical issue for the Fund is overcoming a perception of lack of evenhandedness, which is still prevalent among the membership, particularly for large emerging markets.

The evaluation also detected a significant potential demand by country authorities to use the Fund as an informal sounding board to discuss, for example, hypothetical courses of action at an early stage of policy formulation. But there is often a reluctance to approach the Fund owing to uncertainties as to whether the content of such informal brainstorming will be disclosed. Clarifying what should or should not be disclosed could go a long way toward strengthening the role of the Fund as a trusted advisor.

I am encouraged by the broad agreement, expressed by the Managing Director and the Executive Board, with the findings and recommendations of this report. I hope that this evaluation will prove useful to the Fund’s stakeholders in their ongoing efforts toward strengthening the Fund’s effectiveness.

Moises J. Schwartz Director Independent Evaluation Office

The Role of the IMF as Trusted Advisor

This report was prepared by an IEO team led by Nancy Wagner and Marcelo Selowsky. The IEO team included Ita Mannathoko, Thomas Reichmann, Roxana Pedraglio, and Jérôme Prieur. The evaluation benefited from discussions with participants at workshops held in Berlin—organized jointly with the Federal Ministry for Economic Cooperation and Development (BMZ)—and Washington, and from comments by colleagues at the IEO. Arun Bhatnagar, Annette Canizares, and Mari Lantin provided administrative assistance. Rachel Weaving, Roxana Pedraglio, and Esha Ray provided editorial and production management assistance. The report was approved by Moises Schwartz.

A preliminary draft of this report was discussed at a workshop in Washington in September 2012 with the participation of Jack Boorman, Biagio Bossone, Alberto Carrasquilla, Peter Gakunu, Shyamala Gopinath, Jo Marie Griesgraber, John Hicklin, Yusuke Horiguchi, Takatoshi Kato, Anne Krueger, David Peretz, Wieslaw Szczuka, and Tarisa Watanagase. This version has benefited from their comments and suggestions. However, the final judgments are the responsibility of the IEO alone.



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The following conventions are used in this publication:

  • In tables, a blank cell or N/A indicates “not applicable,” ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.
  • An en dash (–) between years or months (e.g., 2012–13 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (e.g., 2012/13) indicates a fiscal or financial year, as does the abbreviation FY (e.g., FY2013).
  • “Billion” means a thousand million; “trillion” means a thousand billion.

As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

Some of the documents cited and referenced in this report were not available to the public at the time of publication of this report. Under the current policy on public access to the IMF’s archives, some of these documents will become available 3 years after their issuance. They may be referenced as EBS/YY/NN and SM/YY/NN, where EBS and SM indicate the series and YY indicates the year of issue. Certain other types of documents may become available 20 years after their issuance. For further information, see

Executive Summary

The IMF carries out its mandate to foster macroeconomic stability and thereby facilitate prosperity by promoting the adoption of sound policies and international cooperation. Ultimately, the means to achieve these goals is to have Fund policy advice translated into concrete action. Key to achieving such traction is the relationship between Fund staff and member country authorities, together with the quality of the advice and members’ confidence in it. That is, the Fund needs to be seen as a trusted advisor.

This evaluation examines in what circumstances the Fund is viewed as a trusted advisor to its member countries. It uses evidence gathered since 2005, but emphasizes the period since the onset of the global crisis in 2007–08. Because the concept of trusted advisor is “in the eyes of the beholder,” the evaluation derives the main attributes from country authorities themselves.

The degree to which the Fund is viewed as a trusted advisor is found to differ by region and country type, with authorities in Asia, Latin America, and large emerging markets the most skeptical, and those in large advanced countries the most indifferent. But in the aftermath of the global crisis, the Fund’s image has improved markedly, and the Fund is now viewed as more flexible and responsive than in the past. The evaluation explores how the IMF can sustain this more positive image when the crisis abates, while recognizing that tensions will always exist between the Fund’s roles as a watchdog of the global and individual economies and as a trusted advisor to member countries.

The evaluation’s recommendations aim to address some long-standing problems that undermine trust in the Fund and other key challenges identified by this evaluation. Among these:

  • To enhance the value and relevance of the Fund’s advice, Article IV mission teams should consult early with country authorities on their key areas of interest; share with them the major policy issues, macroeconomic framework, and preliminary policy lines prior to the mission; and work closely with them on a country-specific outreach strategy. The Fund should reduce unwarranted disclosure concerns, so Fund staff can act as a sounding board for authorities.
  • To strengthen the continuity of the relationship between Fund staff and members, the staff, in consultation with country authorities, should develop a country-specific medium-term strategic plan and promote an ongoing dialogue and close working relationship with Executive Directors. The Fund should develop incentives for staff that make their role as trusted advisors an important part of their performance.
  • To help address concerns about lack of evenhandedness, the Fund should incorporate early and openly the views of all countries during the preparation of its major policy papers and implement its transparency policy in a consistent and fair manner.

The Fund’s recent reform efforts and initiatives, spurred in part by the global crisis, provide an opportunity for the institution to address some of the findings identified by this evaluation. But to ensure that these reforms truly take root in the culture of the institution will require close monitoring and accountability by all IMF stakeholders over an extended period.

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